Distell says earnings down 5.7%
JOHANNESBURG - Beverage company Distell said its headline earnings a share decreased by 5.7 percent to 668.2 cents in the year to June, but group revenue rose 10.4 percent to R24.2 billion, due to a 4.6 percent increase in volumes.
Distell, Africa’s leading producer and marketer of wines, spirits, ciders and other ready-to-drink beverages sold across the world, said domestic market revenue increased by 10.1 percent and sales volumes rose by 4.4 percent even while the economy continued to show low growth amid increased costs of living placing pressure on consumer disposable incomes.
African markets outside South Africa delivered revenue growth of 19.5 percent on sales volumes which were up by seven percent, largely driven by the inclusion of KWA Holdings in Kenya which was acquired in April 2017.
Focus markets on the continent such as Botswana, Kenya, Zambia, and Zimbabwe all recorded strong growth.
Volumes in international markets beyond Africa grew by 1.8 percent, driven by Europe, Latin America, and Asia-Pacific regions, as well as Travel Retail.
Distell said growth across advanced economies and most emerging markets pointed to a more favourable global economic outlook, but with mixed political and economic risks.
Oil-rich African economies such as Angola and Nigeria had yet to benefit from higher oil prices but remained key pockets of opportunities for the group and its product portfolio.
"The acquisitions of our East and West African route-to-market platforms affirm our approach in balancing country risk and leveraging growth opportunities," it said.
"There are still risks facing the domestic economy in the short term, with consumer income and spending under pressure and rising poverty and unemployment levels going into 2019. "
It added that the recent volatility of the rand, higher grape prices as a result of the Western Cape drought and water shortages presented additional challenges to the business in the short to medium term.
- African News Agency (ANA)